Mike Paterson’s daily Forex brief

Large quantities of Euro buying by a US bank, allegedly on behalf of the IMF for payments to Portugal and Greece, coupled with Spanish bonds falling back below 6% has provided much needed respite, for the moment at least.

EURUSD has rallied to 1.3142, EURJPY back up to 105.94 and EURGBP has moved up from yesterday’s 19-month lows around 0.8210, though the 0.8230 pivot to reach 0.8266 (GBPEUR down to 1.2095). I do continually say nothing moves in a straight line for long and so it’s proved once again.

This move has had traders scrambling out of some other long-USD positions and we’ve seen GBPUSD hold the very strong 1.5800-10 line that I mentioned yesterday, only to bang its head again on the apparent 1.5930 ceiling. CPI and RPI data out at 09.30 may have something to say on this though.

The Aussie had a little run-around after the dovish RBA Minutes raised expectations of an interest cut next time but has had little real change overall.

There has been talk that the BIS has been seen selling EURUSD this morning around the 1.3145 level but we haven’t fallen back too far just yet.

Stop Press: UK CPI has just come in at +0.3% m-o-m and + 3.5% y-o-y with RPI at +0.4% and +3.6%, both in line with expectations and we’ve seen little change in the Pound thus far.

Plenty more data to come today from EZ and US (see below). So hopefully we’ll see whether this Euro respite turns into anything more extensive before the day is out.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

Today’s data:

09.30 –UK- CPI / RPI

10.00- EU- Eurozone CPI / ZEW Economic Sentiment

13.30- US- Building Permits / Housing Starts

14.15- US- Capacity Utilization / Industrial Production

Agree or disagree? Then please leave a comment in the box below or contact me by e-mail.

Mike ‘Oscar’ Paterson has been in the Forex trenches for nearly three decades working as a senior Spot trader in London at UBS, Chief Dealer FX at the State Bank of Victoria and in charge of Spot CHF at Credit Suisse with a daily turnover in excess of $1.5 billion. Mike now works as an independent consultant providing a fully bespoke service to the corporate and private sectors in physical FX delivery as well as guiding those who wish to improve their currency trading. Mike also presents seminars and workshops and writes for a number of publications.
To contact Mike please call +0044 (0) 1732 700383 or email mike.paterson@economicvoice.com
The views expressed above are those of the author and should not be taken as investment advice. MSP Foreign Exchange Services will have no liability for, or to, any persons executing trades based on the content above.

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